Toshiba America Plans a 9% Layoff : Computers: The firm employs about 1,250 workers at its Irvine headquarters. The slow recovery and sluggish sales are blamed.
Toshiba America Information Systems Inc. plans to dismiss about 9% of its U.S. work force, or an estimated 150 employees, over the next two months, the company confirmed Thursday.
The latest in a series of layoffs at the computer company was caused by the unexpected slowness of the economic recovery and sluggish computer sales, company spokesman Robert Wittenberg said. Toshiba America employed about 1,250 workers at its headquarters in Irvine before the layoffs that began Thursday.
The company, a subsidiary of Tokyo-based Toshiba Corp., laid off 65 people in December in a corporate reorganization.
Such layoffs are becoming a common occurrence among high-tech companies. On Wednesday, Hughes Aircraft Co. said it would move a Rancho Santa Margarita division with 475 employees to Carlsbad, possibly resulting in hundreds of layoffs, although the company has not specified an exact number.
Rockwell International in Anaheim and Loral Aeronutronic in Newport Beach have also announced layoffs that will throw hundreds of employees out of work. Collectively, layoffs announced by major high-technology and defense companies since the start of 1992 will cost Orange County more than 1,400 jobs.
The Toshiba cutbacks affect all work groups in Irvine. The subsidiary has 1,650 employees in the United States, including several hundred at a plant that makes copier toner in South Dakota.
Sales of the unit’s most important product, notebook computers that can be carried in a briefcase, also slowed in the latter half of the year because of a supply glut and the continuing computer industry slump.
The firm’s sales figures “aren’t what we anticipated earlier in the year,” Wittenberg said. “Like our neighbors here, we’re having to trim. The economy is not responding the way people thought it would, and there is fierce competition in the notebook computer business.”
Most of the company employees who are subject to the layoff were told Thursday morning and allowed to take the rest of the day off.
“It seems like the old-timers were let go,” said a 38-year-old product marketing manager who was laid off and did not want her name used. “How long you’ve been there--it has nothing to do with whether you stay or not. I sort of question the decision of the company.”
The Irvine resident--considered a veteran though she had just 2 1/2 years at Toshiba--said the layoff is not a complete surprise. Her duties included preparing short-term forecasts of the viability of the computer-systems division.
“I could see it coming,” she said. “I manage one of the more important areas, where you make a day-to-day contribution. Being in that position, I thought I wouldn’t be one of the first to go.”
Toshiba expanded its work force rapidly in Irvine in the late 1980s by pioneering the development of portable computers. The company still commands about 23% of the billion-dollar market, according to the San Jose market research firm Dataquest Inc.
But analysts have said the company stumbled in 1991 because it was slow to bring faster and smaller notebook computers to the market, allowing several competitors, such as AST Research Inc. in Irvine, to establish themselves.
As a result of the heavy competition, Toshiba began laying off employees in January, 1991, and reorganized its management to enable it to respond more quickly. But prospects of a turnaround have been hampered by the severity of the recession.
Wittenberg said employees will be notified about the layoffs in the next two months. He said severance packages will be given “where appropriate” on an individual basis.
Wittenberg would not elaborate. Employees laid off Wednesday said they were given two weeks of severance pay.
Correspondent Ted Johnson contributed to this story.
